Will the Philippines Stand to Benefit from the Global Financial Crisis?

Trying to be optimistic, local business leaders say that the slowdown in the US economy would benefit the Philippines as it creates unique opportunity, our country being an attractive investment destination. This was according to Sergio Ortiz-Luis, chairman of the Philippine Chamber of Commerce and Industry.

Ortiz-Luis also added that since labor and operating costs in the United States soars, most multinational companies are now looking for alternative business locations. He said, these multinational companies are now pulling out their investments on developed countries and are looking at setting up businesses in other countries in order to reduce costs. It could be possible but my guess is most of them will stay fighting it out to survive. Some of them will consider the significant cost of relocation, but for those who would find relocation as highly feasible or good option, they will do so.

Because of this, Ortiz-Luis advised people not to panic over the global economic turmoil. He said, developing countries like the Philippines are somewhat insulated and that developed nations are the one most likely to feel the impact.

Further, Ortiz-Luis stresses the importance that people with influence, like some politicians, to avoid making pronouncements regarding the economy which may cause undue panic. “This is a perception game. I call on politicians, if they have nothing good to say then they should keep it to themselves,” he said. Well, I really hope so that as the mudslinging game escalates between and among politicians our economy should be spared fromthe so-called 'dirty politics'.

Perception will dictate how the country will be affected by the economic crisis happening in the United States and other countries in Europe, according to Ortiz-Luis. He said the government and the private sector are already doing their part to manage the situation.

And with this beliefs, PCCI president Edgardo Lacson agreed with Ortiz-Luis, adding that it is important for people not to panic because it can lead to total collapse.

“If we panic and we do things that are hurtful to our economy then it is a self-fulfilling prophecy” Lacson said. Actions like withdrawing money from the bank even without any cause for alarm. And this mass withdrawals can cause collapse of even strong banks, as this could lead to bank run.

The bottom-line is, we should be aware but at the same time keep our optimism, if Ortiz-Luis’ analysis is correct, the Philippines stands to benefit from this crisis after all.